Delaware Statutory Trust DST 1031 Exchange

Corcapa DST 1031

DST 1031 Property Listings

DST 1031

Delaware Statutory Trust 1031 Exchange

What is a DST 1031?

A DST 1031 is an acronym for a Delaware Statutory Trust which is fractional ownership of real estate. In 2004 the IRS issued a Revenue Ruling clarifying the terms on structuring a DST 1031 investment for 1031 purposes. Please review the IRS Revenue Ruling 2004-86.

Delaware Statutory Trusts (DST 1031s) began in 2004 with the IRS Revenue Ruling 2004-86 which detailed the best structure. Each DST 1031 is a separate legal entity and each investor receives “beneficial interests” in the DST or trust for IRS 1031 purposes. DST 1031s are undivided fractional interest ownership in property. DST 1031s have low minimum investment amounts and therefore create an ability to diversify your current rental property into multiple investments in different cities, states, and asset classes such as apartments and net lease retail. A DST 1031 is a separate legal entity created as a trust under Delaware statutory law. Delaware law permits a very flexible approach to the design and operation of the entity. However, to use a DST 1031 in a Section 1031 tax-deferred exchange private placement program, it is necessary to comply with the requirements of IRS Revenue Ruling 2004-865 so that a beneficial interest in the trust is treated as a direct interest in real estate for income tax purposes. It is also necessary to meet lender requirements, especially if the loan is to be securitized. An efficient and popular vehicle for protecting assets and structuring capital market transactions, a Delaware Statutory Trust is often the special purpose entity of choice for securitizations, liquidations, premium finance programs, life settlements, investment funds, real estate acquisitions, tenant-in-common structures, and much more. CSC Trust Company of Delaware (CSC Trust) can assist you in forming a Delaware Statutory Trust in a cost efficient and expeditious manner. Whether you need active trust administration or a passive resident trustee solely for the purpose of meeting statutory requirements, we will partner with you at every stage to ensure the success of your transaction.

Click here to contact a Corcapa 1031 Advisor for additional DST 1031 Exchange Information and Current DST 1031 offerings.

How is a DST 1031 Structured?

What makes the Delaware Statutory Trust 1031 Exchange (DST 1031) work so well for investors is having the ability to let numerous potential investors vie for the chance to purchase a beneficial interest. While at first glance this may look and sound risky, the opposite is actually true. Under this arrangement, the master tenant simply acquires the property under the Delaware Statutory Trust umbrella and allows investors to join up. This allows them to do one of two things with their money, which is either deposit standard 1031 Exchange profits into the DST 1031 or purchase an interest in DST 1031 directly. With these options investors can find themselves owning such types of property as apartment buildings, medical offices, or even large shopping malls.

DST 1031

RECEIVE A LISTING OF DST 1031 PROPERTIES

DST 1031 Benefits

Potential Benefits of DST 1031 investments include:

Diversification
Investors can select multiple DST 1031 properties as part of their 1031 exchange allowing diversification of asset classes, cities and level of needed non-recourse debt.

Lower Minimum Investments
DST 1031s have lower minimum investments – often as low as $100,000 of equity. If you require a lower investment amount than the stated minimum, let your Corcapa 1031 representative know and we may be able to negotiate a reduction in certain circumstances.

Potentially Lower Fees Than TIC Investments
Because a DST 1031 investment does not require a special purpose LLC entity that needed to be annually maintained and paid for they can potentially have lower fees in than TIC investments.

Potentially Greater Cash Flow
The most common reason that investors select DSTs is for a potentially greater cash flow than they are currently receiving. Most DSTs have between a 4.00% – 5.50% projected cash flow based on the anticipated rental income less expenses. For example, if you invest $1,000,000 of equity into a DST with a 4.5% projected cash flow, this would provide a projected net annual income of $45,000. This could have a higher net cash flow than your current rental property. Note: with all real estate the income cannot be guaranteed because the rental income and expenses can increase or decrease unexpectedly.

Non-Recourse Loans
Virtually all the loans within the DST 1031s that are approved by DAI Securities, LLC are non-recourse which means the investor does not personally guarantee them.

Financing Access
Easier access to financing for investors needing debt on their replacement property and potentially quicker closings.

Lower Risk
Investors like the pre-arranged DST 1031 programs so that some of their 1031 risk is removed.

Larger Property Access
Access to Institutional Grade properties which are typically larger commercial properties that previously required significant capital to purchase.

Potential DST 1031 Risks

Like any investment opportunity, a DST 1031 is not without its share of potential risks. Loan defaults, high vacancy rates, and lack of sole ownership are all distinct possibilities with a DST 1031. However, its biggest advantage is giving some investors the chance to buy into certain properties they otherwise would not be able to do on their own. By consulting with investment advisors on legal and tax advice prior to entering into these investment arrangements, it’s quite possible to not only have more money in your later years, but also much more time to enjoy it as well.

DST 1031 Exchange

Request a FREE DST 1031 Property List

To receive a current list of DST 1031 offerings please fill our the form below

"*" indicates required fields

Name*
Please Confirm You Are An Accredited Investor*

An accredited investor is an individual with a net worth of at least $1,000,000 (excluding the equity in your home) OR net income the last two years of $200,000 or greater ($300,000 if joint income with spouse) with an expectation of equal or greater earnings in the current year.

  • Hundreds Of Successful DST 1031 Exchanges

  • Free Real Estate Portfolio Analysis From Real Estate Expert

  • Free Initial Consultation and 1031 Proposal From A DST 1031 Expert

  • Personally Completed Over 400 TIC & DST Transactions

  • Over 12 Years Experience In Fractional Alternative Real Estate

  • Non Recourse Loans -- Can Close In 3 Days